When to Get a Student Credit Card

One of the biggest money milestones that has become part of our culture is the credit card. Your first credit card is a big deal, and chances are that your first credit card will be a student credit card.

Your student credit card can help you establish your credit history and help you to start practicing good credit and money habits. The truth is that credit is a big part of our society and finances today, and understanding responsible credit use is almost essential if you want to succeed.

How a Student Credit Card Can Help You

Before you get your first student credit card, it’s important to understand how it can help your finances in the future. Here are some of the advantages of student credit cards:

A Simple Way to Begin Establishing Credit

First, it’s important to understand that your credit is your financial reputation. Your credit history is used to make decisions about you—and not just about whether or not you should get a loan. Some of the people that might look at your credit history when making decisions that could impact your finances are:

Landlord: Some rentals require a credit check before approving you. Poor credit could mean a rejection of your tenant application

Internet and cell phone service: Many telecommunications service providers check your credit before approving you for service. With poor credit, you could end up paying in advance, or be unable to get service on your own

Auto insurance: While some states won’t allow insurers to use your credit information when setting premiums, it’s still possible in some states for insurers to set your auto rates based, in part, on your credit

Employers: Your credit score isn’t considered when you apply for a job, but a version of your credit report might be looked at as part of a background check

And, of course, whether or not you are approved for a car loan or a mortgage depends on your credit. Once you are approved, the amount of interest you are charged is based on your credit. You could save thousands of dollars just by having good credit.

A credit card is a simple way to establish credit. And because credit card issuers report your payments and balance monthly, it’s a fast way to start building a credit history. If you don’t have a credit history, it’s time to get a student credit card and start establishing your financial reputation.

Easier to Qualify for a Student Credit Card

One of the advantages to a student credit card is that it’s usually easier to qualify for one of these cards than it is for a “regular” card. Many of the best traditional credit cards require excellent credit. It’s hard to qualify when you don’t have a thick enough credit file.

Student credit cards are designed for those without a long credit history. However, you should realize that this also means that you might see a higher APR. Because you are an unknown risk, the issuer makes up for it by charging a higher interest rate.

When you are sure you are ready to get a student credit card, here are some of the best options:

Journey® Student Rewards from Capital One®

If you are looking for a great card that is designed for those with a limited credit history, consider the Journey® Student Rewards from Capital One®. This is a cash back rewards card that pays 1% cash back on all purchases. When you pay on time, you get 1.25% cash back for that month. This further encourages good credit habits.

One of the benefits of the Journey® Student Rewards card is that you are allowed to choose the monthly due date that works for you. There is no annual fee with this card, and the APR is 24.99%. Not only that, but if you make your first five monthly payments on time, you will get access to a higher credit line.

Discover it® for Students

You can earn 5% cash back on rotating categories with enrollment (up to $1500) and 1% cash back on all other purchases with the Discover it® for Students credit card. For new cardmembers, they also match the entire cash back reward you earned at the end of your first year. And as an added incentive, if you maintain a 3.0 GPA or higher, Discover will give you an extra $20 cash back every school year (up to five years).

The APR starts at a low 14.24% for those with good credit, although you might pay a higher rate if you have a thin credit file. This card has no annual fee.

Citi ThankYou® Preferred Card for College Students

The Citi ThankYou® Preferred Card for College Students from Citi, a Credit Cards Explained advertiser, is one of the few student credit cards with a 0% introductory APR period on purchases. After the 7 month introductory period, the interest rate will be 15.74% - 25.74%* (Variable), depending on your credit. The card also has a signing bonus of 2,500 points after you spend $500 in the first 3 months.

You can earn two ThankYou® points for each dollar spent on restaurants and entertainment, as well as one point for all other purchases. Redemption is for a wide variety of items, including travel, merchandise, cash, and gift cards. There is no annual fee, but keep in mind that you do need to have established some credit history before applying for this card.

Bottom Line

Most student credit cards also come with lower credit limits. This provides you with the chance to practice good credit habits without getting in over your head. Credit cards only work well if you track your spending and you pay off your credit card balance each month. You should only get a student credit card if you are ready to be financially responsible.

Only use your credit card for planned purchases and make sure you already have the money before you charge something. A good strategy is to start by charging one small, planned purchase once or twice a month and then paying it off in full.

With the right approach, you can establish credit and still earn some great rewards even as a college student.

ABOUT THE AUTHOR

Miranda is a financial journalist and expert. Her work has appeared in numerous publications and she has contributed to NPR and appeared on other radio shows and TV. Miranda writes about money at PlantingMoneySeeds.com. Learn more about Miranda Marquit

EDITORIAL NOTE

Any opinions, analyses, reviews or recommendations expressed in this article are those of the author's alone, and have not been reviewed, approved or otherwise endorsed by any card issuer.

Credit Cards Explained may earn affiliate commissions from our partners on this page. These commissions do not affect how we select, rate, or review products. To find out more, read our complete terms of use.

Fair Credit

No Annual Fee

Student Cards

Cards In This Article

Journey® Student Rewards from Capital One®

Discover it® for Students

Citi ThankYou® Preferred Card for College Students

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